The EU Commission (EC) has given its approval to a $597 million (€550 million) Italian State aid scheme designed to facilitate the transition towards a net-zero economy by supporting investments in hydrogen use within industrial processes, according to a press release published Tuesday.
Aligned with the Green Deal Industrial Plan, the scheme falls under the State aid Temporary Crisis and Transition Framework, aimed at accelerating the green transition and reducing fuel dependencies in key sectors.
Italy proposed the $597 million scheme under this framework, intending to encourage the substitution of methane and other fossil fuels with renewable hydrogen.
The aid, provided as direct grants through the Italian National Recovery and Resilience Plan (PNRR), targets companies reliant on fossil fuels in Italian industrial sectors.
Eligible projects must achieve a minimum 40% reduction in greenhouse gas emissions or a 20% reduction in energy consumption compared to current levels.
To be eligible, companies must transition from fossil fuels to renewable hydrogen and can combine this with investments in electrification or enhanced energy efficiency.
The Commission set conditions, ensuring that hydrogen represents at least 40% of total energy inputs from project initiation, reaching 75% by 2032 and 100% by 2036.
The aid measure, capped at $217 million (€200 million) per beneficiary, will be granted before December 31, 2025.
The Commission emphasized the necessity, appropriateness, and proportionality of the Italian hydrogen scheme to expedite the green transition, aligning with the REPower EU Plan and the Green Deal Industrial Plan.
Conditions under the Temporary Crisis and Transition Framework aim to guarantee emission reductions and a shift to hydrogen use, preventing production capacity increases beyond 2%.
Margrethe Vestager, the Executive Vice-President overseeing competition policy, praised the scheme for promoting significant decarbonization in industrial processes and reducing Italy’s reliance on imported fossil fuels.
The approved aid measure is expected to contribute to Italy’s goal of a complete switch to hydrogen by 2036 across supported investments, aligning with broader European sustainability objectives.